The total monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada decreased 9% in June (241,672 units) compared to May (264,929), according to the Canada Mortgage and Housing Corporation (CMHC).
The six-month trend in housing starts decreased 0.4% from 248,260 units in May to 247,205 units in June. The trend measure is a six-month moving average of the SAAR of total housing starts for all areas in Canada, reported the federal agency.
Alexander Isreb
“The actual number of housing starts across Canada in urban centres of 10,000 population and over was down 13% to 20,509 units in June compared to 23,518 units in June 2023. The year-over-year decrease was driven by lower multi-unit starts, down 16%, while single-detached starts were similar to last June,” said the CMHC. “June’s total actual housing starts were markedly lower in two of Canada’s three major cities compared to June 2023, with Toronto down 60% and Vancouver down 55%. Both cities recorded significant declines in multi-unit construction. Montréal was up significantly at 226%, due to much higher multi-unit activity.”
Through the first half of 2024, Canada’s six largest Census Metropolitan Areas (CMAs) saw a modest 4% combined year-over-year increase from 2023, driven by higher starts levels in Calgary, Edmonton, and Montréal which made up for decreases in Vancouver, Toronto, and Ottawa. Among the largest of the big six CMAs, Vancouver and Toronto have seen apartment starts slow as high interest rates and weak condominium pre-construction sales appear to be affecting these centres negatively. Meanwhile, Montréal has observed higher multi-unit construction this year, with apartments starts up 63% from the 8-year low recorded in 2023. Also of note is the higher construction activity in Calgary and Edmonton as starts increased across all dwelling types, driving total starts up 38% and 67% respectively, added the report.
Bob Dugan
“The higher interest rate environment appears to have caught up with some of Canada’s major centres as lower multi-unit starts, particularly in Vancouver and Toronto, drove both the SAAR and Trend down in June. While strong starts growth in June and the first half 2024 in Calgary, Edmonton, and Montréal mitigated some of these decreases, we expect continued downward starts pressure across Canada throughout 2024,” said Bob Dugan, CMHC’s Chief Economist.
Marc Ecolao
Marc Ercolao, Economist with TD Economics, said in the second quarter, urban starts averaged 230k units, slightly higher than in Q1.
“The improvement points to a modest positive contribution to residential investment and overall economic growth for the quarter,” he said.
“Despite June’s anticipated pullback, starts remain well above pre-pandemic levels, as builders have bro-ken ground at elevated rates for purpose-built rental and condo units. However, we believe this tide will turn and starts will trend lower on the back of weak pre-sale activity in key markets and elevated input costs.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list. He was also named by RETHINK to its global list of Top Retail Experts 2024.
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